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Budget Shortfalls Could Reach $600 Million

Sue Lincoln

The House Appropriations Committee has started looking at next fiscal year’s state budget. 

Sitting in front of the committee Tuesday, Commissioner of Administration Jay Dardenne said while they look ahead, they also have to look back at last year’s budget. 

“We have been having discussions all along with the departments this year in anticipation that we would have a shortfall. And as you know," he explained to the committee, "we have a $313 million problem from fiscal year 2016.” 

That’s the shortfall left over from the fiscal year that ended this past July 1st.  The Legislature is required to address last fiscal year's shortfall in this current fiscal year's budget.  The Joint Budget Committee put off acting on that shortfall until later this month. 

A shortfall is also expected in this current year's budget.  Although Dardenne isn't sure what this year's deficit will amount to, he estimates it to be somewhere around $300 million.  He is sure, however, that the work to address both year's budget problems will be significant.  

“We’ve got $313 [million] we have to take out first. Now we’re going to have another 300 [million] plus we’re going to have to take out. Where’s it going to come from?” he asks. 

There aren't many places available to cut $600 million from the state budget, except two sources.

“We have to look at where the dollars are. And unfortunately, the dollars are in education and they’re in healthcare,” says Dardenne. 

“We know it’s going to be a significant problem. It’s going to be dramatic cuts for agencies who already had to make cuts to deal with the [2016] shortfall. The sooner we start addressing it, the longer time period the departments have to be able to spread those cuts.” 

The plan right now is to address the prior year shortfall this month and the current year shortfall in January. In February, the Governor’s proposed state budget for Fiscal Year 2018 is due to the Legislature. 

However, according to Dardenne, “our [2018] budget is not going to be any prettier than this year’s budget was.”